Signature business: Behind the lucrative autograph industry

At his cluttered kitchen table in Myrtle Beach, South Carolina, surrounded by hundreds of trading cards and discarded foil wrappers, Steve Sterpka finally found what he'd been looking for.

The CVS Pharmacy manager had sifted through 15 boxes of Upper Deck baseball cards, hoping to encounter one of the coupons for rare collectibles the company randomly inserted to entice customers. In this case, Sterpka was after the signature of a famous historical figure — George Washington, maybe, or Babe Ruth — that had been paired with a single lock of the person's hair. One collector fortunate enough to score an Abraham Lincoln sold it at auction for $24,000.

The odds were not in Sterpka's favor: Only 10 of the Hair Cut Signatures were available. He'd spent $1,500 to purchase a case of 768 cards. With just 48 remaining, it appeared to be a lost cause.

Then he saw it: a card redeemable for Charles Lindbergh's signature and a strand of the famous aviator's hair.

He contacted Upper Deck. The company sent him a 2.5 x 3.5-inch piece of cardboard featuring Lindbergh's scrawl and a follicular sample. The back of the tiny treasure congratulated its new owner:

You have received a trading card with an historical strand of Charles Lindbergh's hair that includes an autograph of Charles Lindbergh. The memorabilia was certified to us as belonging to Charles Lindbergh. The cut autograph was independently authenticated by a third party authenticator.

That last bit of language is where Sterpka's problems started.

TODAY, FEW AUTOGRAPHS are bought or sold without the blessing of either Professional Sports Authenticator (PSA) or its competitor, James Spence Authentication (JSA). The two companies have come to dominate the market, verifying hundreds of thousands of signatures each year.

Business is so good that they use garbage cans to hold the cash they collect from reviews at hobby conventions. EBay, the world's largest facilitator of memorabilia auctions, endorses both companies to its customers. Nothing seems beyond the scope of their expertise, from Frank Sinatra's scrawl to baseballs defaced by Mickey Mantle.

There's a reason their blessing is so coveted. An unauthenticated signature from Babe Ruth might sell for $250, with bidders wary of its pedigree. But with PSA's endorsement, the same Ruth shoots up to $2,900.

Yet PSA and JSA have one problem: They sometimes get it wrong.

PSA once evaluated a James Earl Jones autograph and labeled it the handiwork of James Earl Ray, Martin Luther King Jr.'s assassin.

JSA gave its thumbs-up to a trading card signed by pioneering boxer Jack Johnson. The card was made in 1948. Johnson died in 1946.

Both companies endorsed a letter signed by turn-of-the-century baseball player Ed Delahanty. Neither appeared to notice that he misspelled his own name as "Delehanty." Moreover, Jerry Casway, the player's biographer, pointed out that Delahanty was in Cleveland on the day he allegedly wrote the letter, which was postmarked in Philadelphia. It still sold at auction for $35,000.

None of this was known to Sterpka, who liked to collect sports cards with his father and had only a passing familiarity with autographs. He was the prototypical consumer: a hobbyist who trusted someone else to make sense of the swooping letters of notable people long dead or far out of reach.

All Sterpka knew was that he owned a coveted Lindbergh. Upper Deck had it evaluated by PSA before purchasing it from a wholesaler. It was later authenticated by JSA, making for a more profitable "dual certification."

But what happened next would be a crash course in the new climate of memorabilia collecting, where letters of authenticity are more valued than the alleged pieces of history to which they're tethered — even if that history was created yesterday.

THE FBI'S OPERATION BULLPEN sting of the late 1990s swept up massive forgery rings around the country. The investigation gained steam when an investigator for Upper Deck, which had an exclusive deal with Michael Jordan, noticed Jordan's signature on items that he knew Jordan had never signed. Agents uncovered forgers passing everything from "signed" NFL helmets to baseballs autographed by Mother Teresa. The merchandise bled into virtually every state, leading to more than 60 search warrants and dozens of arrests.

All told, the bureau estimated that more than $100 million was spent on fraudulent goods — some via unwitting outlets like QVC, others through complicit dealers.

The fakes stunned the billion-dollar memorabilia industry and created consumer paranoia: How could anyone be really sure that Jordan, and not a fry cook, had signed a pair of Nikes?

The answer was obvious to David Hall, a hobbyist who founded a coin-grading service in the 1980s before branching out to sports cards in 1991. In 1998, Hall's company, Collectors Universe, decided to launch PSA/DNA, an autograph-authentication service that would help alleviate concerns about forgers.

"I think that the beginning of the third-party companies really started commensurate with eBay," says Bill Panagopulos, an auctioneer who operates Alexander Autographs in Maryland. "There were so many fraudulent dealers on there that someone saw the opportunity to make money."

Thanks in part to aggressive marketing and consumers shaken by the Bullpen headlines, PSA blossomed, offering to stamp items with invisible "DNA" ink and providing Letters of Authenticity from a panel of experts. The company's prices range from $20 to look at Nicolas Cage's signature to $500 for its judgment on a Babe Ruth.

But there is no such thing as autograph school, says Panagopulos, and no degree can prepare you for the nuances of Ty Cobb's scribbling. Authenticators become proficient by looking at tens of thousands of signatures, analyzing habits, letter sizing, and a confident hand.

Real signatures appear effortless. Forgers often use chemicals to age ink or paper and can display a slow and halting rhythm in duplicating penmanship. Authenticators consider how signatures change as a person ages and use handwriting samples known as exemplars to check for fraud.

Sometimes judgments can be made in moments; other evaluations can take days or weeks. Most experts have a narrow field of personalities they know well enough to critique.

But there seems to be no ceiling to PSA and JSA's abilities. In 2010, a dealer submitted the "signature" of Cheetah, the chimpanzee that was purported to have appeared in the Johnny Weissmuller Tarzan serials of the 1930s. Despite the likelihood that they had no exemplars on file for primates, JSA deemed the scrawl authentic.

As it turns out, Cheetah was an imposter whose owner duped the public before a 2008 Washington Post article uncovered the truth: Weissmuller's chest-thumping co-star was long deceased.

"I don't remember the particulars of that," James Spence says of his endorsement. "I'm not prepared to answer that. I'd have to refresh my memory. I think it was done tongue-in-cheek."

JSA would have needed only to perform a cursory Google search to put the chimp's penmanship in context. But the conveyor belt of submissions makes that unlikely. Spence says his company sees anywhere from 300,000 to 350,000 autographs a year. PSA has evaluated more than three million signatures since 1999, with nearly 400,000 of those in 2013 alone. While both companies list roughly a dozen experts on their respective websites, neither makes it clear whether they have others on call or what their credentials might be.

An undisclosed percentage of those signatures are witnessed, meaning the companies have a representative eyeing a celebrity or athlete signing something. The rest are submitted via auctions, dealers, or collectors, leaving the companies to determine their validity.

But if just one quarter of submissions need evaluating — a conservative estimate — that means the companies are processing 75,000 to 100,000 a year. That's hundreds a day, some of which need to be evaluated by multiple experts.

"Nobody can really make any determination on anything that could be a decent forgery in that kind of time," says Kenneth Rendell, an expert in historical autographs who helped debunk forged Adolf Hitler diaries in the 1980s.

"I tell people that collecting sports memorabilia is like watching pro wrestling. You need a suspension of disbelief."

PSA ISSUED A LETTER of Authenticity to Upper Deck in 2008, asserting that the Lindbergh signature it planned to purchase from wholesale dealer Brian Gray was genuine. (It is unknown who supplied Gray with the autograph; he ignored requests for comment.)

An enthusiastic Sterpka contacted Beckett Select Auctions, which offered to sell his card on eBay and advertise it through its extensive network of hobbyists. Beckett suggested that Sterpka submit the signature to JSA. Though it already had PSA's endorsement, a higher price might be realized if both companies were in agreement.

JSA deemed Lindbergh's autograph to be authentic. Sterpka and Beckett put the card on eBay with a starting price of $10,000.

Their optimism did not account for the moment that Dan Clemons would lay eyes on the auction, chuckle at the amateur nature of the autograph — an uncrossed a, an open-looped g — and immediately deem it one of the worst forgeries he had ever encountered.

"Look at the flaked ink on the C," explains Clemons, offering an impromptu lesson on the Lindbergh in question. "And the top part of the curl on the left-hand side of the L; it's a little, skinny pen, then thicker again as it comes up. Don't you see? That's someone coloring in the bottom part of the curl. Don't you see?"

Most laypeople do not see. But Clemons, who has the erudite cadence of an antiquarian bookseller, became friendly with Reeve Lindbergh, Charles's daughter, in the 1980s. Bit by bit, with access to piles of her father's handwriting, he picked up the nuances of Lindbergh's signature. He soon began to authenticate items when the estate would get requests. Later, he began to scour eBay and look for forgeries.

When he came across Sterpka's auction, he sounded the alarm to eBay's fraud division. The site removed the card. An irritated Sterpka tried to relist it, only to have it taken down again. That's when Clemons phoned him.

"Within 10 minutes," Sterpka says, "I was convinced it was a forgery."

Confused, Sterpka appealed to Upper Deck, sending the card along for examination. But Upper Deck remained convinced that the Lindbergh autograph was genuine.

Sterpka decided to seek another opinion, sending the card to RR Auction, a Beckett advertiser and home to several autograph experts. RR forwarded it to PSA for inspection.

Though PSA had deemed the signature legit just a year before, it issued a new letter signaling retreat. "After a thorough examination of your item," it read, "we regret to report that your item did not pass PSA/DNA authentication."

Sterpka picked up the phone and called an attorney, igniting a lawsuit against PSA's parent company and Upper Deck for fraud and negligent misrepresentation.

His lawyer arranged for Clemons to offer a deposition. "I came loaded for bear," says Clemons, who has thick notebooks citing examples of Lindbergh's handwriting quirks from childhood to just before his death.

By this time, PSA had done another about face, once again declaring the signature genuine. "They said the second one was inadvertently issued," says Douglas Jaffe, Sterpka's lawyer. "It made no sense."

The depositions Jaffe took offered a look inside the turbulent submission process Sterpka's card was subjected to. Testimony revealed no one at PSA could identify who examined the autograph a second time. PSA Principal Authenticator Steve Grad said he had no personal involvement beyond signing the rejection letter.

"A mistake was made," Grad repeatedly told Jaffe.

Though the company now claimed the Lindbergh was authentic, it nonetheless offered $6,000 to settle. Sterpka's lawyer wanted Upper Deck to match it, but Upper Deck refused, betting that Sterpka could not prove his charges.

He couldn't. Last November, a judge shot down Sterpka's suit, noting that both companies believed the signature to be genuine, and therefore could not have intentionally committed fraud.

The result left Sterpka confused. "I've got two documents from the same company saying two different things," he says. "How did I lose this case?"

THE ANSWER — IF ONE EXISTS — lies somewhere in the impenetrability of the authenticating business.

"A certificate," Rendell says, "is only as good as the person signing it."

But PSA's letters typically bear the pre-printed names of several employees and consultants, with no indication of who verified the item in question. Above them is a real signature that's often impossible to decipher, does not have a printed name underneath, and may be from an individual who had nothing to do with evaluating the submission.

"In some cases, one person looks at it," says PSA president Joe Orlando. "In other cases, three or four might. People are buying based on the brand, not on who looked at it or how many people looked at it. [That signature] could be me, or it could be one of the authenticators. It's a finishing touch to let people know it came from our facility."

This lack of transparency often creates confusion over who looked at what and whether their expertise was sufficient for the task.

John Reznikoff, who consults on historical autographs for both PSA and JSA, would be a prime candidate to offer an informed perspective on Charles Lindbergh. Grad told Sterpka's lawyer that he had "deferred to Mr. Reznikoff's expert opinion" when handling the Lindbergh.

Today, Reznikoff says it's "possible" he looked at the Lindbergh. But in his own deposition, he said he had no knowledge of having looked at the signature prior to the lawsuit.

Reznikoff sells autographs via his own University Archives offices in Connecticut, sometimes offering items that bear PSA or JSA endorsements. Other off-site consultants work for auction houses or have their own shingle, many of which market PSA- or JSA-branded merchandise. It's all a bit incestuous, but Reznikoff doesn't admit to any conflict of interest.

"It's a conflict if I'm the only one looking," he says. Orlando says no consultant has the power to pass or fail autographs independent of PSA's full-time experts.

But the genial Reznikoff has his own history of mistakes. In the mid-1990s, he and a paralegal named Lawrence Cusack offered a series of documents purported to be from Marilyn Monroe and John F. Kennedy, detailing their affair and Kennedy's alleged Mob ties.

Reznikoff believed them to be genuine. They enlisted a third party, Tom Cloud, who sold the documents to wealthy contacts. According to a 1997 New Yorker article — one that Reznikoff dismisses as containing numerous factual errors — between $5 million and $7 million was collected.

Yet further investigation revealed that some of the letters used typewriter ribbons unavailable in the era. Moreover, an envelope supposedly from Kennedy included a zip code — two years before zip codes existed. The documents were forgeries.

When police became interested, Reznikoff wore a wire, recording Cusack admitting to the fraud. Cusack went to prison; Reznikoff walked.

Reznikoff admits he couldn't spot the fakes, which would seem problematic for someone purporting to be a historical-document expert for the two biggest authentication companies in the marketplace. He insists that the Kennedy incident was early in his career and that it drove him to learn more about autograph analysis. (He's also a prominent dealer of celebrity hair, and considers it likely that the Lindbergh strand on the Upper Deck card originated with him.)

Reznikoff's other significant gaffe came on Pawn Stars, the History Channel's reality series set in a Las Vegas pawn shop. Brought in by store owner Rick Harrison to opine on a Godfather screenplay signed by "Al," Reznikoff suggested it bore all the telltale signs of Al Pacino's signature.

The segment was forwarded to Al Ruddy, a producer of The Godfather. Ruddy immediately recognized the signature as his own. The highly visible flub left Harrison "a little" upset. "But mistakes happen," he says.

Reznikoff says he is not allowed to discuss the series — which has made minor celebrities of authenticators — but he "never claimed to be an expert in entertainment." He also says other experts on the show still consult with him on items; Harrison says Reznikoff is no longer involved.

Human error is inevitable, and neither company makes any claim to the contrary. Yet both seem to permit mistakes that lack any reasonable explanation.

In 2007, a Fox Philadelphia news crew attended a memorabilia show at which JSA set up a booth to evaluate autographs, including those produced by baseball player Sal Bando, who was sitting just a few tables away.

"That was a former employee of mine," Spence says of the Bando auditor. "I believe he was caught off-guard. I wasn't in the building at the time. They sort of blindsided him with the whole thing.

"I hear that over and over again. No one wants to hear about the good we've done. When someone brings that up — if that's the worst thing they can point to, I'm doing pretty well."

It is not necessarily the worst thing. In 2011, Heritage Auctions offered a letter signed by boxer Thomas Sayers and endorsed by both JSA and PSA. When boxing historians pointed out that Sayers was virtually illiterate — he'd signed a document with an "X" the following year — the auction listing was corrected to reflect that PSA and JSA both believed it to be genuine but could no longer offer certificates "due to a lack of exemplars."

But if no exemplars were available, historians reasoned, what did they compare the signature to in the first place?

Spence says he cannot recall the Sayers incident. Heritage sold the letter for $10,755.

Another Heritage auction, for a 1939 Baseball Hall of Fame induction program, featured a signature by slugger Nap "Larry" Lajoie. It was endorsed by PSA and JSA, despite the likelihood that it was executed while Lajoie was either intoxicated or forgot how to sign his own name. More likely, an inept forger made a mistake, putting a third "R" in his nickname to spell "Larrry." It sold for $41,000.

Then came the instance when PSA authenticated a souvenir letter of surrender signed by Nazi Karl Dönitz after Hitler's death gave him the keys to the Reich. PSA erroneously read the signature as being that of Chester Nimitz, a United States admiral who presumably would not be in a position to surrender German forces, nor in any position to sign a commemorative letter dated 1976. Nimitz died in 1966.

Orlando asserts that no system is perfect, but he is unwilling to offer specifics, growing particularly agitated at the mention of Sterpka. "I don't like the nature of your questions," he says, declining to answer any more.

PETER NASH BELIEVES the authentication companies have turned the autograph market into a commodities trade, where legitimacy is immaterial as long as it's endorsed. Nash is the proprietor of Hauls of Shame, a blog dedicated to documenting every real or perceived mistake made by authenticators.

"Collectors don't collect the item," he says. "They collect the letter from PSA or JSA. They don't even care if they know it's fake. It's like a stock."

He once noticed that a ball purportedly signed by Ty Cobb was manufactured years after Cobb's death. And that PSA identified a Kato Kaelin signature as belonging to Kate Hudson. Nash has logged dozens of other errors — some easily corroborated, others open to interpretation.

Nash's supporters believe he's a watchdog fed up with incompetence and support his inflammatory posts. Others believe he and other bloggers are simply being petty, exaggerating the hit-miss ratio of the companies.

"He's looking for attention," Spence says. "He's a con man."

As watchdogs go, Nash is somewhat neutered by his past. Previously known as Prime Minister Pete of the hip-hop group 3rd Bass, now co-owner of a Boston sports bar, the onetime collector was sued by Robert Lifson, owner of REA Auctions, for failure to pay back a loan he had taken out against the value of baseball memorabilia he had planned to put up for consignment. Nash hadn't delivered everything he promised, Lifson alleged, and what he did was coming under suspicion of not being legitimate.

Lifson won a judgment of $760,000, most of which was collected when he sold Nash's items and — with the court's permission — cautioned buyers that he couldn't guarantee their authenticity.

Without mentioning names, PSA president Orlando believes dissenters have an "agenda" in criticizing his company.

The claim is not without merit. Others who have taken to the internet to wage war on PSA or JSA often fall back on unsubstantiated innuendo. Steve Koschal operated the inflammatory autographalert.com site until the threat of litigation forced him to shutter his doors.

Koschal once ran a story asserting that Lance Armstrong's agent had trawled eBay and found hundreds of fake jerseys endorsed by PSA. Bill Stapleton, Armstrong's agent, says no such audit ever took place. Another time, Koschal reported that a consultant turned down a pile of signatures, then turned around and offered to buy them. Asked who his source was, Koschal said he could not recall.

The companies maintain that any dissent stems in part from dealers disgruntled by the fact that they can no longer pass bad merchandise. "I'd love to hear the argument that anyone would be better off without the third-party authenticators," Orlando says. "It's an imperfect system, but so much better than what the industry had previously."

AMONG TRADING CARDS, autographs, and other collectibles, PSA parent company Collectors Universe reported $14.2 million in service revenue for its last operating quarter. In 2013, it made Forbes's list of America's Best Small Public Companies.

"They get a lot of stuff right," Panagopulos says. "At the end of the day, it's a judgment call. But they don't like to admit when they're wrong."

If PSA and JSA begin to publicly acknowledge mistakes, critics like Nash insist, collectors who have thousands of dollars invested in certified merchandise might begin to doubt the validity of their collections. As it is, with their investments going up in value year after year, there's no incentive for change. In the authenticity business, pretty good has become good enough.

It may get more complicated. "Cut" signatures like the Lindbergh — those clipped from documents that might offer identifying (or damning) details — remain popular. Worse, Panagopulos sees the current crop of celebrity and athlete autographs as little more than a spastic wave of a pen, with no distinguishing characteristics to examine.

"Modern stars sign with a scrawl, not like Lincoln or Washington used to," Panagopulos says. "It's almost impossible to detect a Kevin Costner, which is a K with a straight line."

Sterpka's Lindbergh card was held by his attorney during four years of litigation. He got it back in December.

"I want to believe it's real," he says, "but I know it isn't."

Still, he intends to sell it. "The court said I couldn't prove it was a fake."

Nash believes Sterpka could still profit, even with the controversy. As long as PSA and JSA have endorsed it, it will forever remain a liquid commodity.

The potential for resale is unlikely to matter to either Clemons or eBay. The former says he's done policing the site; Gonzales contends that the people currently overseeing the memorabilia division aren't as vigilant as he was. In the end, he was left with one lesson in the current state of the autograph trade.

"It doesn't have to be authentic," Gonzales says. "It just has to be authenticated."